You Buy Extended Warranty — Should

For many consumers, the cost of the warranty exceeds the likely cost of repairs. However, it can provide significant "peace of mind" for those who cannot afford a sudden, large repair bill.

If a $2,000 engine or transmission repair would be a financial disaster, paying a smaller, fixed amount for a warranty functions like an insurance policy. When to Skip It should you buy extended warranty

Deciding whether to buy an extended warranty—often called a service contract—depends largely on your personal finances, the reliability of the product, and your tolerance for risk. For many consumers, the cost of the warranty

Instead of paying for a warranty, financial experts like those at Kiplinger and Investopedia often suggest putting that same amount into a dedicated . This way, if the product never breaks, you keep your money; if it does, you have the cash ready to cover it. When to Skip It Deciding whether to buy